Administrative contracts

The Supreme Court (SC) has resolved an important issue regarding the time that the Public Administration has to pay invoices when contracting services with private companies. It all started when a company claimed late payment interest because the Administration took too long to pay its invoices, arguing that it should pay them within 30 days from the invoice submission. However, the Administration argued that the contract allowed for a longer period , up to 60 days, because it included an internal procedure to verify and accept the invoices. In the first instance

, the High Court of Justice (HCJ) ruled in favor of the company and recognized its right to those interests for the delay, stating that the special deadline can only be applied if well justified and it is not enough to refer in a general way to public procurement regulations. However, it did not end there, as the Administration appealed special deadline can only be applied if it is well justified and referring in a general way to public procurement regulations is not sufficient. However, it did not stop there, as the Administration appealed and, finally, the SC ruled in his favor.

The SC considers that, in this type of contracts, the parties (company and Administration) may agree on a different payment procedure than the legal one as long as it is not abusive and does not harm the general interests. It is essential, however, that this procedure appears clearly in the contract and complies with the limits set by European legislation , the normal period should not exceed 30 days, except in exceptional cases that can go up to 60 days, but only if they are duly justified (as the Court of Justice of the European Union, CJEU, has also stated). The normal deadline should not exceed 30 days, except for exceptional cases that can go up to 60 days, but only if they are duly justified (as also stated by the Court of Justice of the European Union, CJEU).

Therefore, if the contract foresees a validation and acceptance system for invoices that may last more than 30 days, this regime is valid and must be respected. However, always within the limits allowed by law and without causing abuses. Thus, interests cannot be claimed for delays from the mere presentation of the invoice if the validation process provided for in the contract has not been completed.